Fundamental analysis Brent for 11.01.2022
Current Dynamics
This week Brent demonstrates mixed dynamics. On the one hand, the hydrocarbons market is supported by the weak dollar, supply disruption in some regions, as well as the forecasted deficit on the market. On the other hand, the upward potential of the instrument is restrained by epidemiological risks.
First of all, today traders expect the speech of the head of FRS Jerome Powell. The fact that Goldman Sachs experts said that 4 rounds of monetary tightening in 2022 are highly probable, which came as a surprise to the market. Investors hope that the head of the U.S. regulator will bring clarity to the matter.
Another important factor is an unclear epidemiological situation in China. The report has not been published yet, information coming to mass media is very contradictory. If the largest consumer of oil restricts the movement of transport, the volume of consumption of petroleum products, and fuel, in particular, will fall sharply, as will the price of oil.
Also worth noting are fears of supply disruption from Kazakhstan and the gradual recovery of production volumes in Libya. The forecast of a supply shortage within the OPEC+ remains relevant.
Federal Reserve Chairman Jerome Powell will speak today at 17:00 (GMT +2). At 19:00 (GMT+2), the EIA will release its short-term energy market forecast.
Support and resistance levels
On the 4-hour chart, the instrument strengthened above the moving average of the Bollinger bands. The indicator has reversed upward and the price range has contracted, indicating a correction of the uptrend. MACD histogram is in the positive zone, maintaining a weak buy signal. Stochastic is approaching the overbought area, no signal to open positions has been formed.
- Support levels: 76.10, 77.44, 78.75, 80.38, 81.45.
- Resistance levels: 82.50, 83.75 and 85.30.
Trading scenarios
- Long positions can be opened at the current price with a target of 82.80 and a stop loss at 80.90. Implementation period: 1-2 days.
- Short positions should be opened below the level of 80.95 with a target of 79.65 and a stop-loss at 81.60. Implementation period: 1-2 days.